Tip #40 – The one thing everyone needs organized – TAXES
Set up a file in your home label TAXES and the year. If you are part of a couple filing a joint return, make sure the other person knows where this file is located. Throughout the year, if you make a donation, put the receipt in this file. If you donate goods, make sure to rate the value of the goods donated.
I keep a spreadsheet specifically for donations throughout the year. I have one column for cash donations and one for in-kind donations.
In January, when you start receiving W2s and 1099s place them in the past year file you already have started. When you have filed your tax return, move that year’s folder into long-term storage(long-term storage just means that the files do not need to be kept where that take up space in your day to day life). HOPEfully, you never have to refer to previous year’s documents but its good to keep them for 7 years, just in case. If you are trying to go paperless, scanned documents are accepted for many things. Personally, I do not keep any receipts once they are scanned.
***Always refer to a tax professional with questions